Metroeconomica最新文献

This paper seeks to identify terminology to aid in distinguishing the approaches to the theory of price determination as presented in classical political economy, neoclassical economics and post-Keynesian economics. Through a review of the respective literature, a dominant usage is identified for the theoretical price concept in each theory. Natural price is identified with classical theory, equilibrium price with neoclassical theory and administered price with post-Keynesian theory. Use of the differentiated terminology is advocated for improving clarity in pluralist discourse on the theory of price determination and the role of prices in modern market economies with their inherent complexity.

This paper presents a labor-constrained aggregate model of growth that explains stagnation and inequality as the result of structural change, which is defined as an exogenous increase in the employment share of low-productivity services. Productivity growth is increasing in the labor share, reminiscent of induced technical change. Productivity and real wage growth further are assumed to respond negatively to structural change. We label the positive (negative) difference between these effects dominant Lewis (Baumol) dynamics. In steady state, and across two model variants, structural change leads to stagnation. Only the model version with Keynesian aggregate demand, dominant Lewis dynamics and a weak profit squeeze also exhibits a falling labor share, and hence conforms to key stylized facts.

In this paper, we present an agent-based model in which taxpayers ‘live’ in a network and care about their social reputation. Individuals decide whether to pay or to evade taxes considering the expected economic net benefit and the reputational cost from tax evasion. Individuals differ in income and in the weight they attach to social reputation, which is updated by assessing the opinions shared in their reference group. The reference group contains individuals irrespective of their income (integrated society) or it is made up of peers belonging to the same income group (segregated society). We simulate the model in the two alternative settings to find the frequency distribution of taxpayers in a dataset of random networks. The results indicate that, in an integrated society, network conformity is reached and all individuals either evade or pay their taxes. Conversely, a segregated society might generate obstacles to the diffusion of opinions and, as a result, tax evasion and tax compliance might coexist. Lastly, we consider the effects of a social media campaign starring a celebrity financed by a fiscal authority to increase overall tax compliance by exploiting the diffusion dynamics in the network. We show that such a policy is more effective if the diffusion of opinions is not hindered by social segregation. In an integrated society, especially if income inequality is low, a celebrity's endorsement of tax compliance might nudge widespread socially responsible tax behaviour.

The 2009 article by Professors Bloise and Reichlin offers the opportunity to clarify the ‘neo-Ricardian’ critique, which is not fully grasped by the two authors. Bloise and Reichlin identify long-period analysis with steady states, which obscures the relevance of the supply-side problems of the conception of capital as a single factor. Also, they seem not to grasp how indefensible intertemporal general equilibrium theory is, because of the impermanence problem and of the absurdity of perfect foresight of novelties. But in fact the acceptance of neoclassical theory rests, not on general equilibrium theory, but on faith in the traditional marginalist adjustments based on capital conceived as a single factor—a conception destroyed by the neo-Ricardian critique, which therefore destroys the entire neoclassical approach. This critique points to problems which are logically prior to the instability issues to which Bloise and Reichlin reduce the critique; stability can be discussed only under ‘even-conceding’ assumptions (illustrative examples are Marshall, and Fratini).

This paper establishes that entry and exit stabilize the top half of the profitability distribution in the post-1970 U.S. economy. We, first, document stability in the distribution of total profits earned on tangible, intangible, and financial capital. Whereas a narrower measure of returns on tangible capital, instead, suggests rising dispersion, it fails to capture post-1970 growth in intangible and financial assets. Second, we use quantile decompositions to show that churning—specifically, exit for cause—regulates median and top-end profitability. Thus, the process by which competition drives out unprofitable firms acts to stabilize profit rates in the U.S. economy.

We analyze whether, due to the effects on corruption, institutional quality, and offshoring affect comparative advantage, income inequality between countries and economic growth. We start by developing a theoretical model of endogenous R&D growth for an integrated area with two representative countries that differ in the economic development level. Then, we estimate an econometric model with panel data, considering combinations of 14 different countries, between 2000 and 2017. We show that an improvement in offshoring increases the comparative advantage of developing-South countries and decreases the wage gap between developed-North and South countries. In turn, an improvement in institutional quality increases the comparative advantage of the North and widens the wage gap between countries. Whatever the improvement, there is always an increase in the world economic growth rate. Thus, all countries can improve their position in international trade, labor market, and economic growth through the conduction of policies that reduce corruption and, respectively, increase the quality of institutions and the attractiveness for the offshoring.

Two alternative strategic foundations have been identified for applications of the Nash bargaining solution in economic modelling. However, neither interpretation is consistent with treating “threat point” or disagreement payoffs as individual outside options, a salient feature of bargaining relationships in most labor market settings. This paper uses a matching and strategic bargaining model to examine the determination of bargaining power weights and threat points in the asymmetric Nash bargaining solution. The key result establishes a strategic foundation for applying this solution to market settings with endogenously determined outside options, and shows that bargaining weights depend on outside market conditions only when the matching prospects of one side of the market or the other are relatively high.

We estimate a bi-variate LVSTAR model to investigate the non-linear interplay between Brazil’s credit, output and financial cycles between 1999 and 2017. We use financial stress as the regime-switching variable to assess how it impacts economic performance. We find evidence of a lengthy transition between regimes. Moreover, Granger Causality tests indicate statistical precedence of credit growth through financial intermediaries. After credit shocks, we find non-mean-reverting trajectories and that financial stress worsens the economic downturn. Counterintuitively, total credit growth increases after adverse output shocks. This appears to be caused by elevated public credit provision relative to private credit flows, triggered by anticyclical policy.

The purpose of this study is to establish a theory-consistent econometric model for the Canadian–US dollar exchange rate over the post-Bretton Woods floating period, 1975–2021. In pursuing the objective, this paper reviews Canadian history in the context of major political events, bearing in mind the importance of oil for the Canadian economy, and it also assigns importance to allowing for structural breaks in the early 1980s and 2000s observed in the data. The overall empirical results support the fundamental-based view of the long-run exchange rate determination. This study also examines long-run and short-run influences of oil prices on the exchange rate dynamics because of the anticipated significant role for the US–Canada dyad.